The contrast between the in-market and out-of-market reaction to the Edmonton Oilers’ signing of Ryan Nugent-Hopkins to a seven-year, $42-million contract has been interesting to watch. In the market, there’s broad support; elsewhere harsh criticism.

So who is right? Are the in-market people blinded by partiality, or is this a case where the out-of-market guys just don’t know what they’re talking about?

The Bridge Contract

The idea behind a bridge contract is simple: once a player finishes his entry-level deal, he gets a short-term offer that a) keeps him motivated and b) pushes back his real payday to his third contract. The advantage for teams is that it gives them a few years of high performance at a bargain price, and it allows them to be surer of the player before committing big dollars. The disadvantage is that if the player is really good, he may a) resent being underpaid relative to his actual ability and b) make the team pay for it in a big way when the bridge contract ends.

Balanced Risk

Conventional thinking suggests that bridge contracts are low-risk, and long-term deals high-risk, because if the player goes south the team is protected from the damage of a long-term contract. Conventional thinking is wrong, though: this is about balancing risk. The bridge contract protects against the risk of a player underperforming, but exposes the team to extreme risk (in the form of a massive third contract) if the player performs well. A long-term deal exposes the team to the risk of a player underperforming, but protects them if the player posts excellent numbers.

Also well worth noting: because of how NHL buyout rules are structured, long-term deals to young players are in many ways lower risk than long-term deals to older players. For example, compare the possible 2015 buyouts of Taylor Hall and the Maple Leafs David Clarkson. Despite Hall’s higher salary, the Oilers would pay less in real dollars ($10 million vs. $18.3 million) and have a significantly lower cap penalty. If a team is going to make a big mistake on a player contract, it’s far better to do it with an under-25 player because salaries can be bought out at one-third their cost rather than two-thirds.

There is no ‘one size fits all’ option here. Whether the bridge deal or the long-term contract makes the most sense depends heavily on both the individual player and the individual team.

A team contending now may be well-advised to force the bridge deal to gain the maximum benefit immediately, because it’s more important to win the Stanley Cup now than it is to worry about the cap implications three years down the road. A bad team, on the other hand, cares less about the immediate cap implications and needs to try and make their salary situation as favourable as it possibly can be for when their window to contend opens.

At the individual level, the ability and likelihood of a player living up to potential matter a lot, too. If the player has an indifferent record in leagues below the NHL but suddenly produces in the majors, that’s a much bigger signing risk than a player who has dominated at every level. A good question ask too is whether a player’s point totals driven by linemates, on-ice or personal shooting percentage, or some other highly variable factor? If they are, the amount of risk involved escalates.

The Edmonton Oilers

Using the factors we outlined above, would bridge contracts have been a good idea for Nugent-Hopkins, Hall or Eberle?

At the team level, the long-term deal is the obvious play. The Oilers have been bad for years and are trying to turn things around; it makes no sense to try and pinch every penny at this stage of the rebuild – what matters is putting the team in a solid salary cap footing three, four, and five years from now.

At the individual level, both Hall and Nugent-Hopkins are unquestionably good bets. John Tavares is often cited as an example of strong contract work - he recorded 0.75 points per game over his first two NHL seasons, a total that Hall and Nugent-Hopkins both matched. Additionally, being a consensus first overall pick says something too: it says that pre-NHL these players were projected to be difference-makers at the highest level. With that projection, and with both players living up to that projection over their first two seasons, these deals aren’t especially risky.

The Eberle contract is the lone deal of the three that stands out as a significant risk. Eberle’s pre-NHL resume is less impressive, his breakthrough NHL season was powered to no small extent by personal and on-ice shooting percentages, and because he got the contract closer to his peak years there’s less room for him to improve. Eberle’s 2012-13, despite lowered scoring totals, was reassuring in that his numbers in other areas (on-ice shots, specifically) improved. I’m personally not wild about the deal but don’t see it as a real problem. In any case, even in the very worst scenario (the extremely unlikely case of the player completely imploding) Eberle can be bought out for a total of $8 million in the summer of 2015, with an extremely modest $1.0 million cap hit – the same amount the Leafs paid to buy Darcy Tucker out of a $3.0 million/year deal.

Put shortly: it would be stupid and short-sighted for a team that’s bad in the here-and-now to insist on signing short-term deals with players that are extremely good bets. No amount of criticism from the chattering classes can change that basic reality. And a year from now, when P.K. Subban cashes in on his Norris Trophy after Montreal foolishly insisted on a bridge deal, even that criticism is likely to be muted.

Recently around the Nation Network

After back-to-back losses to the defending Eastern Conference Champion Boston Bruins, the Jets finished their third preseason in Manitoba with a 1-4-3 (Wins-Losses-Overtime/Shootout losses) record– last in the new Central Division. This isn't exactly what one would expect from a team looking to make that final push into the postseason for the first time in six years, but the operative word–preseason– says there's little reason to start panicking.

Click the link above to check it out, or feel free to check out some of my recent stuff below:

Jonathan Willis is a freelance writer.
He currently works for Oilers Nation, Sportsnet, the Edmonton Journal and Bleacher Report.
He's co-written three books and worked for myriad websites, including Grantland, ESPN, The Score, and Hockey Prospectus. He was previously the founder and managing editor of Copper & Blue.

Once apond a time we the fans wish we had a filthy rich owner who can pay and keep star player's here in edmonton long term. we finally got our wish so enjoy embrace, plan a route cause mr Stanley is coming home baby !!!

I wanted to bring up the fact the Oilers have set the salary standard. No other Oiler for the next 6 years can make more than 6 mil, B/C let's face it, no Oiler should make more than Hall, Ebs and now Nuge. With the bar set at 6 mil and the cap set to go up every year, the Oilers have set themselves up to be regular contenders (within the cap) for a while!

The Tavares deal would have looked like crap if he played last season with two injuries, including a broken finger, as his stats would have reflected those injuries. Eberle is an overpay, but a healthy season may erase the heavy criticism.

Sign the core.If Shultz Jr does not fall on his face sign him this season long term.Yak next summer.

If you build a winner the mercenary players looking for a cup to end their career will come.

This team is moving slowly in the right direction(finally) the injuries to the top two centers put a hurt on this year.It will be a real struggle to reach the playoffs.

Get some center depth sometime this year even if it is at the trade deadline.Hemsky Shultz Sr are both unrestricted and should be shipped to a contender but only for very good ,almost ready prospects.The time for magic beans has passed.

Even if RNH was willing to take a bridge deal at say 2 years x 4. When he signs his next contract for 7 years you could be looking at 7. In the end what's the difference. All you end up doing is fighting, creating I'll will and the dollars in total would be similar. I hate the idea of paying based on draft status potential, but I kinda agree that it was a no brainer deal. I do think it could of been done for 5.5-5.75 later on and there was no rush.

I think Montreal wishes they had Subban locked up to a 7 year x 5 mil deal, cause he will command 7.5-8 in a couple years.

You say Eberle’s pre-NHL resume is less impressive than Hall and RNH and that his contract is more of a risk but did you forget that he won the Canadian Major Junior - Player of the Year award his last year in Junior, something neither Hall or RNH have never won.

He also led the AHL in scoring while they they were all playing there and was a finalist for an NHL award. He played a lot of last season with a broken hand which I believe is why his point production dropped and is already tied for the NHL lead in points this preseason.

I don't believe for a second that he's more of a risk and I do believe he's worth every penny of his contract. I also believe he's got the smartest hockey sense out on the ice of any of the Oilers save maybe RNH.

"And a year from now, when P.K. Subban cashes in on his Norris Trophy after Montreal foolishly insisted on a bridge deal, even that criticism is likely to be muted."

Not to mention, when the cap goes up substantially and GMs continue to spend like drunken sailors.

This kind of media hectoring ("Old Manning" as LT calls it) is par for the course. A lot of these guys aren't really presenting arguments (which are there for the taking up) so much as grumbling about a variety of typically off-ice grievances.

P.K Subban may never get in the Hall of Fame or win a Stanley Cup; but he will always be mentioned in the same sentence as 'Bridge Contract.' Good work P.K!
In regards to this article anyways, the risk regarding RNH is definitely there. I only say that because of his Shoulder. When he is healthy which I don't think he was last season. He is a stud. No matter what you think about each one individually locking up your best 3 players for 18 million a season is never a bad thing.

Good article, I think these contracts are going to look great as soon as 2014-15, and no one will be asking these sorts of questions when they lockup Yak in the same way. Could be a model other teams start to follow. Using a tier system for developing pay scales for both forwards and defense.

On anther note is there a good site where you can get up to date waiver wire info? Most are at least a day old.

I wanted to bring up the fact the Oilers have set the salary standard. No other Oiler for the next 6 years can make more than 6 mil, B/C let's face it, no Oiler should make more than Hall, Ebs and now Nuge. With the bar set at 6 mil and the cap set to go up every year, the Oilers have set themselves up to be regular contenders (within the cap) for a while!

I doubt you can really set a bar.

Remember Doughty? Lombardi of LA Kings tries to use Kopita's 6.8M to set the bar but Doughty's agent just doesn't buy it.

I love to sign Yak to 6M, but I don't mind Yak getting a little over if the salary goes up.
I like J. Schultz but I don't think he should get 6M. Voynov get 4.2M, OEL gets 5.5M, Karlsson and Pietrangelo get 6.5M. Schultz needs to have a great year to justify 6M.

The thing is all teams have contracts that are going to look like deals in four or five years so it is relative to that. Hall and Nuge are fine, but it is squeezing dollars else where that gives a GM the ability to make a solid team. We did not do this with Eberle and we messed up the Gagner situation as well. Oilers gave away all leverage and they could have came out of it with close to 2M in savings if done properly.

Eberle is a fence-sitter regarding the "value" of his contract.

It's well within his capability to cover the bet. That said, as JW notes, his contract is much more high risk and tethering it to Hall's number never made much sense.

The one smart thing Tambo did with Eberle was staggering his and Hall's contract expirations.

Tambo completely effed up Gagner and put MacT in a right pickle. Given the circumstances MacT finessed a very favorable contract out of Gagner.

The other "bridge" deals on the Oilers to watch (Petry and Dubs) will be interesting... and will be quite a tell on how MacT intends to manage the lesser lights of the team.

If Eberle covers his 6 Million in two or three years good for him. Doesnt mean he should be paid the same as Hall. A good GM would have gotten better value. I mean Tavares is 5.5M. Getting good value is what would allow the oilers to keep all these stars together. Eberle may cover his contract but it is not good value.

I won't entirely disagree with you.

but if he covers the bet value wise... he covers the bet. The fact that Hall manages (probably) to wildly over-perform his contract doesn't take that away.

Or, put it this way: If you get incredible value on bananas but only good value on oranges... does the incredible value on bananas invalidate the good value on oranges?

No.

Eberle's contract remains and is going to remain the high-risk of the big contracts. He may clear the bet, he may not. Tambo could have gotten better value here. There is no question about that.

In 4 maybe even only 3 years time....those contracts are going to seem like a drop in the bucket.The second half is extreme value even for Eberle, and already value for Hall.

The thing is all teams have contracts that are going to look like deals in four or five years so it is relative to that. Hall and Nuge are fine, but it is squeezing dollars else where that gives a GM the ability to make a solid team. We did not do this with Eberle and we messed up the Gagner situation as well. Oilers gave away all leverage and they could have came out of it with close to 2M in savings if done properly.

If Eberle covers his 6 Million in two or three years good for him. Doesnt mean he should be paid the same as Hall. A good GM would have gotten better value. I mean Tavares is 5.5M. Getting good value is what would allow the oilers to keep all these stars together. Eberle may cover his contract but it is not good value.

The thing is all teams have contracts that are going to look like deals in four or five years so it is relative to that. Hall and Nuge are fine, but it is squeezing dollars else where that gives a GM the ability to make a solid team. We did not do this with Eberle and we messed up the Gagner situation as well. Oilers gave away all leverage and they could have came out of it with close to 2M in savings if done properly.

I don't know how you can sign Eberle to a lesser contract than Hall when Eberle outperformed Hall 2 years in a row when they signed their long contract.

If Eberle outperformed Hall again last year, today we may be saying that we overpaid Hall.

Until the contract is over, all are just speculation and gambling. Just like Taveres's and OEL's contract are a bargain and Tyler Myers' contract looks like a bad one.

I wanted to bring up the fact the Oilers have set the salary standard. No other Oiler for the next 6 years can make more than 6 mil, B/C let's face it, no Oiler should make more than Hall, Ebs and now Nuge. With the bar set at 6 mil and the cap set to go up every year, the Oilers have set themselves up to be regular contenders (within the cap) for a while!

You say Eberle’s pre-NHL resume is less impressive than Hall and RNH and that his contract is more of a risk but did you forget that he won the Canadian Major Junior - Player of the Year award his last year in Junior, something neither Hall or RNH have never won.

He also led the AHL in scoring while they they were all playing there and was a finalist for an NHL award. He played a lot of last season with a broken hand which I believe is why his point production dropped and is already tied for the NHL lead in points this preseason.

I don't believe for a second that he's more of a risk and I do believe he's worth every penny of his contract. I also believe he's got the smartest hockey sense out on the ice of any of the Oilers save maybe RNH.

That's because Ryan Nugent-Hopkins and Taylor Hall were busy playing their second NHL seasons while Jordan Eberle was winning CHL Player of the Year.

And, as it happens, Eberle's production didn't drop off after his hand injury.

I think most fans generally make more out of potential "player resentment" than they should, especially when it comes to bridge contracts.

I don't know how much players are concerned about their cap hit, but it's probably much less than their concern about their bank account balance.

If a long term deal works out like this:

Year 1: $2.5M
Year 2: $3.9M
Year 3: $5M
Year 4: $6.1M
Year 5: $8.5M
Year 6: $9M
Year 7: $7M

Cap Hit: $6M

And a two year bridge deal breaks down as:

Year 1: $3M
Year 2: $4M

Cap Hit: $3.5M

Then the dollars given to the player are pretty close, but the team saves on cap space over the first two. The player likely gets a little more in salary to make up for what he gives up in security of a long term deal. But still, the player isn't being cheated out of any money here and would have little reason to be upset or think they're getting a raw deal.

The next contract, however, could end up being very different depending on how much the player improves, and how much the cap rises over the span of the bridge deal. Even if the second half looks similar to the corresponding years of the original deal, then the team is still taking a pretty big hit on their cap space compared to what it would've been had they signed the player to a long term deal from the start.

Long term deals give the team a break in the expensive years by carrying more of a cap hit in the cheaper dollar seasons. If the team has cap room early then it's wise to carry a bigger cap hit to start to save them when the player will be earning more. Even if they pay the player the same money each year, it's still a consideration on the overall value of the deal.

Taylor Hall is already worth 6 million. RNH will be by next season at the latest. Eberle might fluctuate a bit more and have some seasons where he's a steal and others where he is more of a 4.5 million dollar player but even he is a reasonable bet.

The best thing for me is that if Taylor Hall makes 6 million, nobody on this team should make any more than him. The line in the sand has been drawn.

The Subban deal is a perfect example of a bridge contract gone horribly wrong. He's going to cost a pretty penny next summer.

That tiny little area in my brain that recognizes 'extreme sense-making' (i.e. not the part that came up with that phrase) just exploded.

JW, I love it when someone comes along, takes some common believe or understanding or some piece of our culture that we all seem a slave to and exposes it to some actual critical thought. A fair share of your articles fall into that category and I don't think I'll ever tire of it.

While I think New York, Philly, and Montreal were smart to go the bridge-deal route on account of their cap situations, I think a lot of the Eastern media have decided that bridge contract = good, long term second contract = bad.

While I think New York, Philly, and Montreal were smart to go the bridge-deal route on account of their cap situations, I think a lot of the Eastern media have decided that bridge contract = good, long term second contract = bad.

Not always.

long term contracts after ELC in the east
Overchkin, Stamkos, Taveres, Tyler Myers, Skinner, Karlsson, McDonagh, and Mike Richards and Jeff Carter were both signed to long term contracts after their ELC by the Flyers.

I'm curious at what point does a buyout become more costly for an older player?

I've always liked Gagner and was fairly happy with the 3 years we signed him to (because I was afraid of another 1 year kick in the nuts deal). What happens at the end of three years though? If Gagner underperforms, then I guess it won't be a big loss. But what happens if he tears it up?

I'm not suggesting Gagner gets the same term or numbers as our other kids but time will tell whether 3 years was smart on our part. We shall see.